Chapter 839: EntrepĂ´t Trade
Skaed kept this matter close to his chest, merely indicating that so long as the East India Company was willing to sign a long-term trade agreement, the Lingao side could supply any Ming commodities they required—including the raw silk and silk goods the Dutch most coveted. As for prices, they would undercut both Zheng Zhilong and Liu Xiang. Skaed proposed that the finest "Nanjing silk" at Qiongzhou FOB price would be 110 taels per dan. The Dutch currently paid as much as 145 taels per dan for Nanjing silk transported by Chinese merchants to Tayouan.
This price delighted Van der Lanthroon. If sufficient raw silk could be loaded at Lingao, then ships departing from Batavia need not return immediately to Batavia after unloading. Some vessels could proceed directly north to Tayouan Port and onward to Japan. Copper and silver exported from Japan and transshipped through Tayouan could likewise be brought to Lingao as payment for transactions. Trade route arrangements would become far more flexible than before, and ship transport capacity could be maximized.
Van der Lanthroon immediately expressed willingness to sign the trade agreement. Both parties initialed a draft special trade agreement covering the re-export of Ming commodities. The Department of Colonization and Trade would sell raw silk, silk goods, tea, porcelain, medicinal materials, and sundries to the Dutch East India Company. Both parties agreed upon related prices. Specifically: 2,500 dan of raw silk at 110 taels per dan; 5,000 dan of refined white sugar at 4 taels per dan; 10,000 bolts of silk at an average price of 1.2 taels per bolt; and various other sundries. The Dutch East India Company would prepay 100,000 Spanish Reals to guarantee that Lingao could maintain steady supply through 1631.
The Dutch were not stingy about advance payments in trade. It was precisely through such prepaid deposits that the East India Company could secure cheap and sufficient goods regardless of market fluctuations, rendering their competitors unable to turn a profit.
Because the matter was of such magnitude, Van der Lanthroon lacked authority to formally sign such an agreement, so both parties merely initialed the draft. Of course, this agreement alone was enough to leave Van der Lanthroon so giddy with joy he scarcely knew where he was. This arrangement was far more favorable than the unfulfilled supply agreement that Governor Nauts, stationed at Tayouan, had signed with Zheng Zhilong several years prior. Not only had prices been reduced, but there was also growth in the supply quantity that had long vexed the East India Company.
The signing of this single agreement could make Van der Lanthroon famous throughout Batavia. After all, this was the door to direct China trade that the Dutch East India Company had always dreamed of opening. Now it had actually been accomplished by this minor junior merchant—how could he not be overjoyed?
Whether the agreement could actually be executed remained to be seen. But Van der Lanthroon did not doubt that this band of "Australians" had the capacity to deliver. If the entire agreement could be fulfilled, his own future in the Company would be bright indeed. He might very well become a member of the Dutch East India Company's Batavia Council before long.
Van der Lanthroon struggled to maintain his composure so as not to betray his elation at the negotiating table. Skaed then made several special commodity requests.
Specifically: horse imports.
Throughout Southeast Asia and East Asia, horses were scarce commodities. Not only were the breeds poor and the animals undersized, but the numbers were insufficient as well. Nike had submitted a report to the Planning Institute requesting efforts to expand the horse population and improve breeding efficiency, but he looked down upon the Dian horses that could be obtained from nearby regions. The Dian horse's small stature and wretched pulling power made it of little use for Lingao's industry, agriculture, or military. Mongolian horses, while passable, could not be obtained in large quantities, and frankly, everyone looked down upon them too. Both the military and the Agricultural Department called loudly for quality riding horses and draft horses to be obtained as soon as possible.
Obviously, relying on Nike and his apprentices and helpers at Gaoshan Ridge to perform artificial insemination on their own—even if one stallion could cover 200 mares a year—given the current base population of horses, many years of self-breeding would be required before they could supply sufficient numbers. Purchasing large quantities of horses from external sources was plainly the only viable path. Moreover, their current stallion resources were far from ideal—besides a pair of Tieling draft horses, they possessed only a single retired racehorse.
Although the various famous horse breeds the Senators coveted were almost all found on the opposite side of the globe, the biological department under the Agricultural Department had confirmed that horses meeting Senator requirements were indeed produced in Persia and India. These could serve as the urgently needed riding horses and draft horses.
After research by the biological department under the Agricultural People's Committee, they concluded that several types of horses could be imported through the Dutch.
First was the Japanese Nanbu horse. This was a small strain from the "raiki" lineage produced in northern Honshu. Adult horses could reach approximately 150cm at the shoulder, considerably taller and more robust than the 120-130cm average shoulder height of Mongolian horses. They could serve as either riding horses or draft animals. This breed had been purchased and employed by allied forces during the Second Opium War, becoming the mounts for allied artillery and supply units. At that time, the allied forces had purchased several thousand horses across Southeast Asia and Japan to supplement their strength, and they rated the Nanbu horse highest of all. This was the horse breed closest to Lingao that could provide a relatively large quantity all at once.
Another was the Marwari horse from India. This breed was said to descend from crossbreeds of the warhorses used by Alexander's armies, allegedly carrying Turkmen and Arabian horse bloodlines. It had evolved in India into a breed that could thrive in arid and barren terrain and was widely used across the Indian subcontinent as mounts for both armies and nobility. Its greatest advantage was that this horse was already in widespread use on the Indian subcontinent, which obviously gave it a significant edge in adapting to Hainan Island's climate compared to other breeds.
Van der Lanthroon was not particularly enthusiastic about the business of transporting horses. Among goods shipped across the sea, livestock were the most troublesome to transport. Horses were sensitive animals, prone to becoming startled and dying during sea voyages. They had exacting feed requirements and demanded large amounts of drinking water. They also occupied enormous cargo hold space. So although horses commanded high prices in East Asia, the East India Company had little interest in transporting them.
Of course, since the Dutch were the "sea coachmen," they would not refuse any goods their customers required. The East India Company had even transported elephants in Southeast Asia—not because the Dutch needed them, naturally. Now that the Australians, who had promised to open the golden door of China trade, needed horses, the East India Company would do its duty and would go through fire and water to obtain them. Furthermore, Skaed had already made clear that "generous prices" would be offered for horses.
"This matter—I will most certainly do my utmost for Your Excellency," Van der Lanthroon said respectfully.
Transporting Nanbu horses presented temporary difficulties—the Hirado trading post was currently closed. But transporting Indian horses posed no problem. The Company already had trade routes to India and trading posts established there. Additionally, he could request the Persian trading post to purchase some horses as well. Of course, horses from both sources would not come cheap.
"Of course, of course." Skaed nodded. "Besides these several types of horses, I know that Europe possesses many excellent breeds..."
"It will take a very long time," Van der Lanthroon said. "If you require European horses, I will only be able to deliver them at least three and a half to four years from now. And frankly speaking, I fear the price will be unacceptably high."
"Indeed." Skaed sighed with regret. "But I still hope to obtain some fine European horses." He then submitted a list of breeding horses.
Van der Lanthroon took it and glanced down. He stared in astonishment for several minutes. The list enumerated excellent horse breeds common across Europe. It was remarkably comprehensive—light, medium, and heavy types; warm-blooded and cold-blooded alike. There were many breeds even Van der Lanthroon himself did not recognize.
"Good Lord!" Van der Lanthroon muttered quietly. "You have studied horses quite thoroughly."
"We are genuinely fond of horses. Unfortunately, there are not enough quality horses here." Skaed laughed heartily. "As long as you bring me the horses alive and kicking, the price is negotiable. Oh, and I want no geldings. All horses must be young, not over two years of age. And fertile."
"I will do my utmost to serve Your Excellency." Van der Lanthroon bowed respectfully. "I am Your Excellency's faithful servant."
That evening, Skaed hosted a reception to celebrate the trade agreement between the two parties. Skaed was beaming. Reaching a trade agreement with the Dutch was highly advantageous for Lingao. First, it effectively alleviated gaps in material supply. Second, the other party shipped at their own expense, delivering directly to the door—the ideal arrangement for Lingao, which suffered from severe shortages of transport capacity. And this entrepôt trade arrangement, he believed, fundamentally solved the "foreign exchange" problem. Not to mention that the Dutch had also promised to prepay an advance of 100,000 Reals. Of course, Skaed harbored many more ideas about entrepôt trade.
As for reaching an agreement with the Dutch to purchase horses—while this was greatly appreciated by the Agricultural Department and the military—Skaed considered it incidental, merely icing on the cake. Without horses, development would not stagnate, but without grain, timber, and the other specified catalog commodities, the impact would be on the entire situation.
Van der Lanthroon attended the reception in the newly decorated trading house hall. The brilliant light emanating from the electric lamps and the abundance of exquisite glassware and bone china employed at the banquet left him dumbstruck. Although the gathering was not large, as a junior merchant of the East India Company, being hosted at a banquet by a high official who ranked among the nine members of the Senate's Executive Committee made this minor Zeeland nobleman feel enormously honored. After all, in Batavia, he did not even possess the qualifications to attend the Governor's small banquets. Van der Lanthroon gulped down copious quantities of rum mixed with sugar and fruit juice at the reception, and finally passed out and had to be carried away.
(End of Chapter)